Finance and Management Committee
May 12, 2026
AGENDA REPORT
TO: Jestin D. Johnson FROM: Bradley Johnson
City Administrator Director of Finance
SUBJECT: FY 2026-27 Tax and Revenue
Anticipation Notes
DATE: April 23, 2026
City Administrator Approval Date:
RECOMMENDATION
Staff Recommends That The City Council Adopt An Ordinance Authorizing The Borrowing Of Funds And The Issuance And Sale Of 2026-27 Tax and Revenue Anticipation Notes In A Principal Amount Not To Exceed $200,000,000 Payable from Revenues Received For Or Accrued To The General Fund Of The City During The Fiscal Year 2026-27, And Approving Certain Related Matters.
EXECUTIVE SUMMARY
Adoption of the proposed ordinance will authorize the borrowing of funds and the issuance and sale of the City of Oakland (the “City”) 2026-27 Tax and Revenue Anticipation Notes (the “Notes” or “TRANs”) in a principal amount not-to-exceed $200,000,000 in one or more series.
TRANs are issued to address temporary cash flow deficits arising from fluctuations in monthly tax or revenue receipts that the general fund is dependent on to meet its monthly cashflow needs during the fiscal year. The cashflow needs include the prepayment of the City’s Employer Unfunded Accrued Liability (“UAL”) contribution to CalPERS for fiscal year 2026-27. The City will receive an approximate 3.34% prepayment discount from CalPERS for the "pre-funding." The Notes will mature no later than 15 months from the date of issuance. Debt service on the Notes will be secured by taxes and revenues received for the general fund during fiscal year 2026-27.
The Ordinance only authorizes the borrowing of funds. Staff will return to City Council in June 2026 with a resolution authorizing the terms and provisions of the Notes, the sale of the Notes, the agreements relating to the Notes, a preliminary official statement for the Notes and other related documents.
BACKGROUND / LEGISLATIVE HISTORY
Pursuant to Section 53850 et seq. of the Government Code of the State of California contained in Article 7.6 thereof on or after the first day of any fiscal year, a city may borrow money by issuing notes for any purpose for which a city is authorized to expend moneys, including but not Jestin Johnson (Apr 30, 2026 10:55:29 PDT)
Apr 30, 2026
Jestin D. Johnson, City Administrator
Subject: FY26-27 Tax and Revenue Anticipation Notes
Date: April 23, 2026 Page 2
Finance and Management Committee
May 12, 2026
limited to current expenses, capital expenditures, and the discharge of any obligation or indebtedness of a city.
Pursuant to Section 219 of the Charter of the City, an ordinance is required to authorize the borrowing of money. The City can issue Notes at the beginning of a fiscal year in order to avoid cash deficits prior to the receipt of significant property tax revenues from the County in December and April of each year. Under federal tax law, the principal amount of a tax-exempt TRAN may not exceed the maximum projected cumulative deficit during the first six months of the fiscal year, as demonstrated by a monthly cash flow projection. Under Article 7.6, the principal of and interest on the TRANs may not exceed 85% of the estimated amount of the then uncollected taxes, income, revenue, cash receipts, and other moneys of the local agency which will be available for the payment of the principal of and interest on the TRANs.
ANALYSIS AND POLICY ALTERNATIVES
Since the schedule in which the City receives its revenues (including property taxes, business license taxes and sales and use taxes, etc.) is irregular, the General Fund has temporary cash flow deficits. These deficits are "made-whole" at the end of each fiscal year when all of the revenues are received. The issuance of Notes is necessary to alleviate the short-term cash flow deficits within the City's General Fund for fiscal year 2026-27. In effect, the Notes will positively impact the City's finances as these Notes will be critical to meeting the operating expenditures of the City.
Current expenses include the prepayment of the City’s UAL contribution to CalPERS for fiscal year 2026-27. The UAL contribution is a payment required by CalPERS under State law for sponsoring employers like the City. By making a lump sum payment by July 31, 2026, instead of monthly payments throughout the fiscal year, the City will receive from CalPERS a prepayment discount of approximately 3.34% of the required annual UAL contribution. Only the UAL portion of the employer contribution can be pre-funded. The Normal Cost 1 portion of the employer
contribution will be made as part of the regular payroll reporting process.
The issuance and sale of the Notes will be in an amount not-to-exceed $200,000,000, consisting of one or more series, with a maturity no later than (15) months after the date of issuance. The Notes may be issued as federally tax-exempt and/or taxable securities with one or more maturity dates. Debt service shall be payable from taxes, revenues, income, cash receipts and other moneys which are received for or accrued to the General Fund of the City during fiscal year 2026-27 and which are available for the payment of current expenses and other obligations of the City. In order to meet the CalPERS prepayment deadline and access the financial market, staff recommends approving the Ordinance, which takes two readings to
1 The minimum required employer contribution includes the sum of two components: 1) Normal Cost (“NC”) Rate, which represents the annual cost of service accrual for the upcoming fiscal year, for active employees. Normal cost is shown as a percentage of payroll and paid as part of the payroll reporting process. 2) Annual payment on the Unfunded Accrued Liability (“UAL”) is the amortized dollar amount needed to fund past service credit earned (or accrued) for members who are currently receiving benefits, active members, and for members entitled to deferred benefits, as of the valuation date. The UAL can be paid monthly or upfront for the upcoming year.
Jestin D. Johnson, City Administrator
Subject: FY26-27 Tax and Revenue Anticipation Notes
Date: April 23, 2026 Page 3
Finance and Management Committee
May 12, 2026
become effective. Staff will return to City Council with a resolution authorizing the sale of the Notes and approving other related documents. A proposed financing schedule is included in the following Table 1 below.
Table 1
Table 1: Proposed Financing Schedule
Date Item
5/19/2026 1st reading of Ordinance at City Council
6/2/2026 2nd reading & adoption of Ordinance by City Council 6/9/2026 Resolution scheduled for Finance & Management Committee 6/16/2026 Resolution adoption by City Council
Week of 7/6/2026 Pricing of the Notes
7/22/2026 Closing of the Notes
7/31/2026 Deadline to submit prepayment of FY26-27 UAL to CalPERS
RELATED PLANNING EFFORTS
This agenda item is a routine item and does not relate to any Oakland strategic planning efforts.
FISCAL IMPACT
The Notes are a one-year borrowing; the debt service on the Notes will be secured by and payable from taxes and revenues received for or accrued to the General Fund in fiscal year 2026-27. Fees associated with issuance of the Notes will be paid from proceeds of the Notes, contingent upon closing of the transaction.
By making the prepayment of the required contribution to CalPERS in fiscal year 2026-27, the City will receive a prepayment discount of 3.34 percent from CalPERS. These "savings" are realized by the prepayment discount CalPERS gives the City for "pre-funding" the lump sum amount, as opposed to normal periodic payments.
PUBLIC OUTREACH / INTEREST
No outreach was deemed necessary for the proposed policy action beyond the standard City Council agenda noticing procedures.
COORDINATION
This report was prepared by the Treasury Bureau in coordination with the Finance Department, Office of the City Attorney, and Budget Bureau.
Jestin D. Johnson, City Administrator
Subject: FY26-27 Tax and Revenue Anticipation Notes
Date: April 23, 2026 Page 4
Finance and Management Committee
May 12, 2026
Bradley Johnson (Apr 30, 2026 08:19:25 PDT)
RACE AND EQUITY
Adoption of the proposed Ordinance will have no direct impact or opportunities related to race and equity.
ACTION REQUESTED OF THE CITY COUNCIL
Staff Recommends That The City Council Adopt An Ordinance Authorizing The Borrowing Of Funds And The Issuance And Sale Of 2026-27 Tax and Revenue Anticipation Notes In A Principal Amount Not To Exceed $200,000,000 Payable from Revenues Received For Or Accrued To The General Fund Of The City During The Fiscal Year 2026-27, And Approve Certain Related Matters.
For questions regarding this report, please contact David Jones, Treasury Administrator, at (510) 238-6508.
Respectfully submitted,
BRADLEY JOHNSON
Director, Finance Department
Reviewed by:
Dawn Hort, Assistant Treasury Administrator
Treasury Bureau, Finance
Prepared by:
Christina Shaw, Principal Financial Analyst
Treasury Bureau, Finance